Company fined $375,000 for unfairly overcharging Centrelink recipients
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We have all found ourselves in situations where we feel exploited or taken advantage of, whether because of our age, financial circumstances, or other factors beyond our control.
Today, we bring you a story of triumph and justice prevailing—a tale where Centrelink recipients finally receive the rightful compensation they deserve!
The Federal Court has handed an Australian company called Layaway Depot a substantial fine of $375,000. This decision came after an investigation revealed that the company had been unfairly overcharging vulnerable Australians for essential household items.
Layaway Depot specifically targeted Centrelink recipients, individuals often in financially precarious situations. They would impose exorbitant interest rates on these customers when purchasing common goods and gadgets such as mobile phones, televisions, and speakers.
One such case was a customer who paid instalments totalling a whopping $780 for a Bluetooth speaker that retailed for just $200! In another incident, a person was charged $1,200 for a mobile phone that retailed for a mere $249.
ASIC Deputy Chair Sarah Court expressed her disapproval, stating, 'For a consumer to pay almost five times the market price for a mobile phone is excessive. For most of the consumers, their sole income was Centrelink benefits.'
She continued, 'ASIC will continue to take action where we see consumer harm in the provision of credit, especially where financially vulnerable consumers are involved.'
As a result of this much-needed intervention, anyone who has made at least one repayment to Layaway Depot for their goods will no longer be required to make any further payments and can keep their items.
Sarah Court explained further, 'ASIC took on this case because we believed Layaway contracts were deliberately structured to get around consumer protections that exist under the Credit Act.'
She added, 'These protections, such as the maximum rate of annual cost that can be charged, are in place to ensure credit is provided to consumers fairly, and people are not being taken advantage of.'
After a thorough investigation, the Federal Court found Layaway guilty of engaging in unlicensed credit activity, charging consumers in excess of the annual cost rate of more than 48 per cent with respect to 70 payment arrangements.
Consequently, a permanent injunction was ordered, restraining Layaway from engaging in credit activity and entering into credit contracts with an annual cost rate exceeding 48 per cent.
We strongly encourage our members to exercise caution and stay vigilant when making purchases, particularly when dealing with credit agreements and loans. It's important to be alert for warning signs and to question any deals that appear too good to be true or have questionable terms.
It's reassuring to witness companies being held accountable for their dishonest actions. We must remain informed and safeguard ourselves against the dangers of predatory lending practices because, ultimately, our hard-earned money and our rights are worth defending.
What are your thoughts on this story? Have you encountered similar incidents or cases involving other companies or retailers? Have you ever been a victim of such practices? We invite you to share your experiences with us in the comments section below!
Today, we bring you a story of triumph and justice prevailing—a tale where Centrelink recipients finally receive the rightful compensation they deserve!
The Federal Court has handed an Australian company called Layaway Depot a substantial fine of $375,000. This decision came after an investigation revealed that the company had been unfairly overcharging vulnerable Australians for essential household items.
Layaway Depot specifically targeted Centrelink recipients, individuals often in financially precarious situations. They would impose exorbitant interest rates on these customers when purchasing common goods and gadgets such as mobile phones, televisions, and speakers.
Layaway unfairly charged Centrelink recipients excessive prices for household goods. Credit: Unsplash/Towfiqu barbhuiya.
One such case was a customer who paid instalments totalling a whopping $780 for a Bluetooth speaker that retailed for just $200! In another incident, a person was charged $1,200 for a mobile phone that retailed for a mere $249.
ASIC Deputy Chair Sarah Court expressed her disapproval, stating, 'For a consumer to pay almost five times the market price for a mobile phone is excessive. For most of the consumers, their sole income was Centrelink benefits.'
She continued, 'ASIC will continue to take action where we see consumer harm in the provision of credit, especially where financially vulnerable consumers are involved.'
As a result of this much-needed intervention, anyone who has made at least one repayment to Layaway Depot for their goods will no longer be required to make any further payments and can keep their items.
Sarah Court explained further, 'ASIC took on this case because we believed Layaway contracts were deliberately structured to get around consumer protections that exist under the Credit Act.'
She added, 'These protections, such as the maximum rate of annual cost that can be charged, are in place to ensure credit is provided to consumers fairly, and people are not being taken advantage of.'
After a thorough investigation, the Federal Court found Layaway guilty of engaging in unlicensed credit activity, charging consumers in excess of the annual cost rate of more than 48 per cent with respect to 70 payment arrangements.
Consequently, a permanent injunction was ordered, restraining Layaway from engaging in credit activity and entering into credit contracts with an annual cost rate exceeding 48 per cent.
We strongly encourage our members to exercise caution and stay vigilant when making purchases, particularly when dealing with credit agreements and loans. It's important to be alert for warning signs and to question any deals that appear too good to be true or have questionable terms.
It's reassuring to witness companies being held accountable for their dishonest actions. We must remain informed and safeguard ourselves against the dangers of predatory lending practices because, ultimately, our hard-earned money and our rights are worth defending.
What are your thoughts on this story? Have you encountered similar incidents or cases involving other companies or retailers? Have you ever been a victim of such practices? We invite you to share your experiences with us in the comments section below!
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